Quiz 11 of ECON251 Purdue University In Tutorial Library

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TITLE: Quiz 11 of ECON251 Purdue University

UNIVERSITY / INSTITUTE: Purdue University

CLASS / COURSE: ECON 25100: Microeconomics

QUESTION DESCRIPTION:

Quiz 11 (Chapter 11)
 
1. Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion
Refer to the above table and information. At the profit-maximizing level of output, marginal revenue will be: 
 
 A. $25 and marginal cost will be $15    
B. $25 and marginal cost will be $25  
C. $35 and marginal cost will be $30  
D. $35 and marginal cost will be $35  
 
2. Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion
 
Refer to the above table and information. At a price of $45, marginal revenue will be: 
 
A. $15 and marginal cost will be $20  
B. $25 and marginal cost will be $15  
 C. $35 and marginal cost will be $10    
D. $45 and marginal cost will be $5  
 
3. Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion
Refer to the above table and information. At what output and price levels will the firm produce in the short run? 
 
A. 3 units and $45  
 B. 4 units and $40    
C. 5 units and $35  
D. 6 units and $30  
 
4. Assume that the short-run cost and demand data given in the table below confront a monopolistic competitor selling a given product and engaged in a given amount of product promotion
 
Refer to the above table and information. What will total profits be at the profit-maximizing output and price? 
 
A. $65  
B. $85  
 C. $90    
D. $110  
 
5. In the long run, a representative firm in a monopolistically competitive industry will typically: 
 
A. Have an elasticity of demand that will be less than it was in the short run  
B. Have a larger number of competitors than it will in the short run  
C. Produce a level of output at which marginal cost and price are equal  
 D. Earn a normal profit, but not an economic profit    
 
6. Firms in an industry will not earn long-run economic profits if: 
 
A. Fixed costs are zero  
B. The number of firms in the industry is fixed  
 C. There is free entry and exit of firms in the industry    
D. Production costs for a given level of output are minimized  
 
7. Refer to the above graphs. A short-run equilibrium that would produce profits for a monopolistically competitive firm would be represented by graph: 
 
 A. A    
B. B  
C. C  
D. D  
 
8. Refer to the above graphs. A short-run equilibrium that would produce losses for a monopolistically competitive firm would be represented by graph: 
 
A. A  
B. B  
C. C  
 D. D    
 
9. Refer to the above graphs. The long-run equilibrium for a monopolistically competitive firm is represented by graph: 
 
A. A  
 B. B    
C. C  
D. D  
 
10. Refer to the above graphs. Which graph would not be a possible depiction of short-run or long-run outcomes for a monopolistically competitive firm? 
 
A. A  
B. B  
 C. C    
D. D  
 
11. Monopolistic competitive firms are productively inefficient because production occurs where: 
 
A. Marginal cost is greater than marginal revenue  
B. Marginal cost is less than marginal revenue  
 C. Average total cost is greater than the minimum average total cost    
D. Average total cost is less than the difference between average total cost and average variable cost  
 
12. In long-run equilibrium, a monopolistically competitive firm achieves: 
 
A. Productive and allocative efficiency  
B. Productive efficiency but not allocative efficiency  
C. Allocative efficiency but not productive efficiency  
 D. Neither allocative efficiency nor productive efficiency    
 
13. A unique feature of an oligopolistic industry is: 
 
A. Low barriers to entry  
B. Standardized products  
C. Diminishing marginal returns  
 D. Mutual interdependence    
 
14. An oligopolistic market is consistent with: 
 
A. All firms making economic profits  
B. A small number of firms in the industry  
C. The existence of barriers to entry  
 D. All of the above    
 
15. The primary copper industry in the United States would be an example of a: 
 
A. Duopoly  
B. Noncollusive oligopoly  
 C. Homogeneous oligopoly    
D. Differentiated oligopoly  
 
16. A high concentration ratio indicates that: 
 
A. The industry is not profitable  
B. The industry is highly competitive  
C. Many firms produce most of the output in an industry  
 D. Few firms produce most of the output in an industry    
 
17. The following are the respective numbers for the four-firm concentration ratio and Herfindahl index in an industry. Which set of numbers would indicate that the industry is oligopolistic? 
 
A. 10 and 50  
B. 24 and 263  
C. 25 and 207  
 D. 77 and 1807    
 
18. Industry Y is dominated by five large firms that hold market shares of 20, 20, 25, 25, and 10. The Herfindahl index for this industry is: 
 
A. 1560  
 B. 2150    
C. 2340  
D. 3500  
 
19. The Herfindahl index for an industry is 2550. Which of the following sets of market shares and industry with four firms would produce such an index? 
 
A. 20, 20, 30, and 30  
B. 25, 25, 25, and 25  
 C. 20, 25, 25, and 30    
D. 10, 20, 30, and 40  
 
20. The Herfindahl index for an industry is 2750. Which of the following sets of market shares and industry with four firms would produce such an index? 
 
A. 10, 30, 30, and 30  
B. 15, 25, 25, and 35  
C. 5, 25, 30, and 40  
 D. 15, 20, 30, and 35    
 
 
  

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1. Business Economics
2. Economics
3. Microeconomics

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